Sanderson Farms Posts $33 Million Q1 Loss

Sanderson Farms Inc. reported results for the first fiscal quarter ended January 31, 2011. Net sales for the first quarter of fiscal 2011 were $427.7 million compared with $420.1 million for the same period a year ago. For the quarter, the company had a net loss of $33.6 million, or $1.52 per share, compared with net income of $15.8 million, or $0.75 per share, for the first quarter of fiscal 2010. The company’s results for the first quarter of fiscal 2011 include a charge of $22.3 million, before income taxes, to reduce the value of live inventory from cost to market. Excluding this adjustment, the net loss for the first quarter of fiscal 2011 was $19.2 million, or $0.87 per share.

“The results for the first quarter of fiscal 2011 were influenced by a number of factors,” said Joe F. Sanderson, Jr., chairman and CEO of Sanderson Farms Inc. “Overall, we experienced lower poultry market prices than the same period a year ago, primarily due to an oversupply of chicken during the first quarter of fiscal 2011. While retail demand for chicken has remained steady, we have continued to see weak food service demand, and we expect this trend will remain until the national unemployment rate improves. Consumers are simply not dining out as frequently and restaurant traffic has remained under pressure. We also experienced a significant increase in feed costs during the quarter, compared with a year ago, and this affected our profitability.”

“While market conditions have been challenging, we are pleased with the successful start-up of our new Kinston, N. C., facility,” Sanderson continued. “This project was completed on time and on budget, and, as planned, we began processing chickens in Kinston in January 2011. At full capacity, which is expected to be reached early during calendar 2012, the Kinston complex will employ approximately 1,500 people and will be equipped to process and sell 6.7 million pounds per week of dressed poultry meat. We look forward to the new marketing opportunities the Kinston plant will provide for Sanderson Farms as we embark on our next phase of growth in fiscal 2011.”

In addition to the Kinston facility, Sanderson Farms previously announced its intention to develop and construct a second North Carolina complex during fiscal 2011. While the company continues to evaluate various alternatives for a suitable location, management has determined it is in the best interest of Sanderson Farms and its shareholders to delay construction of this project. In light of escalating prices for feed grains and the very tight supply of corn in particular, the company believes it prudent to delay construction of the second North Carolina facility until management has better visibility around the 2011 feed grain crops in the United States. While the company’s balance sheet is strong and it remains committed to the second North Carolina complex, it believes it is prudent to be conservative with its working capital and balance sheet at this time.

“We believe fiscal 2011 will be a challenging year for Sanderson Farms and our industry,” Sanderson added. “We are already experiencing escalating grain prices, especially for corn, which are at near-record levels. The U.S. Department of Agriculture recently reported that corn supplies are at their tightest levels in 15 years.

“Experience tells us that production adjustments will ultimately balance supply and demand and support market prices that will allow us, over time, to offset higher feed costs. Such adjustments will take time. Despite the challenging environment, we will continue to operate our business with a focus on those things we can control. We remain confident about the future of our business, our balance sheet remains sound, and we look forward to the opportunities ahead in fiscal 2011. As always, our goal is to operate at the top of our industry and deliver long-term value to our shareholders,” Sanderson concluded.

Source: Sanderson Farms Inc.

Arkansas processor recalls uninspected products

Petit Jean Farm, a Morrilton, Ark., firm, is recalling an undetermined amount of various meat and poultry products that were produced without the benefit of federal inspection, the U.S. Department of Agriculture's Food Safety and Inspection Service announced.

Products subject to the recall include various cuts under the Meadow Lamb, Meadow Beef and Petit Jean Farm brands.

The firm is recalling all the products listed above which are currently in commerce. These products were sold through the Internet, as well as distributed to local markets and restaurants in Arkansas. The products subject to recall bear the establishment number "EST. 10650" inside the USDA mark of inspection, which does not belong to the recalling firm.

It should be noted that this recall does not impact products produced at Garner Abattoir & Meat Processing (Est. 10650) or Morrilton Packing Co. which does business as Petit Jean Meats (Est. 10646). FSIS encourages consumers to review the labels on the products subject to recall very carefully.

The problem was discovered through a consumer complaint regarding a product purchased at a local market. FSIS has received no reports of illnesses due to consumption of these products.

Source: FSIS

Maple Leaf Foods reports Q4, year-end results

Maple Leaf Foods Inc. reported its financial results for the fourth quarter and the year ended December 31, 2010. Adjusted operating earnings increased 24% to $71.4 million in the fourth quarter, due to improved performance in the Meat Products Group, and 13% to $222.0 million for the year. Net earnings in the quarter were $30.2 million compared to $21.9 million last year; net earnings for the full year, which included $71.3 million of non-cash pre-tax charges, were $25.8 million compared to $52.1 million last year.

"Maple Leaf Foods delivered strong earnings growth in the fourth quarter, despite a sharp increase in raw material prices" said Michael H. McCain, president and CEO. "These results reflect the benefits of cost reductions and price increases intended to help us keep pace with global food inflation, and some early benefits from the initial execution of our strategic plan. We expect the progress we are making in reducing our cost structure, simplifying our product lines, and streamlining our operations will contribute to earnings throughout 2011."

Sales for the fourth quarter of 2010 decreased 9% to $1,212.0 million compared to $1,324.9 million last year, primarily due to the sale of the Company's Burlington pork operation during the quarter and the effect of an additional week in the fourth quarter last year. For the full year ended December 31, 2010, sales were $4,968.1 million, compared to $5,221.6 million in 2009.

Maple Leaf is implementing a number of near-term initiatives to increase margins in the prepared meats business as part of the company's value creation plan. These initiatives aim to reduce complexity and costs by, among other things, standardizing ingredient formulations, product sizes and specifications across all categories. Some early benefits were realized in 2010.

The implementation of the value creation plan also involves a number of significant changes in the company's prepared meats plant network. These changes will reduce costs through the closure of sub-scale plants and the consolidation of production volumes in other facilities. To this end, in November 2010, Maple Leaf announced the closure of its prepared meats facility in Berwick, Nova Scotia and, in early 2011, announced plans to close its prepared meats facility in Surrey, British Columbia. These closures are expected to result in lower costs and contribute to earnings later in 2011. The company is also implementing price increases across its prepared meats business in response to rising meat costs.

Source: Maple Leaf Foods Inc.

Bubba Burger to open restaurant chain

BUBBA burger is announcing the development of its Original BUBBA burger Grill restaurants. The announcement was made by Billy Morris, President and CEO. Original BUBBA burger Grill is a fast casual restaurant chain featuring a menu centered around all varieties of the premium BUBBA burger – or BUBBAs – including its Original, Sweet Onion, Jalapeno, Reduced Fat, Mini BUBBA Bites, All Natural and Certified Angus Beef as well as the new All Natural Turkey BUBBA burger.

"BUBBA burger is already the number one choice in America's homes and backyards," says Morris. "This will make BUBBA burger Grill ideally positioned for success and growth in the premium burger segment of the restaurant industry."

Guests of BUBBA burger Grill will create their own unique BUBBA by selecting from a wide variety of options including their choice of BUBBA burger variety, buns, toppings, cheeses and sauces. Additional options include the BUBBA chicken sandwich and a mini BUBBA dog platter.

"Our BUBBA fans have been asking us for years to open restaurants where they could get their BUBBAs on the go when they were away from home," said Morris. "Our new BUBBA burger Grill will feature the great taste, quality and personality that our customers nationwide have come to expect from our famous BUBBA burger."

Following the chain's initial four units currently under development in Jacksonville, Fla., BUBBA burger Grill plans to grow across the country through traditional restaurant locations as well as food courts, airport locations, college campuses and sporting venues.

In addition to the continued growth of corporate-owned locations, the Original BUBBA burger Grill is also focused on nationwide growth with select business partners.
For more information on BUBBA burger Grill visit www.bubbaburgergrill.com or at BUBBA burger Grill on Facebook.

“With a strong national fan base that is growing once again, NASCAR is the ideal platform for our El Monterey brand to extend its reach to the consumer,” said Bryce Ruiz, president and CEO of Ruiz Foods. “Our El Monterey products are perfect for every eating occasion – particularly race day gatherings. Each product in our Mexican line is easy to prepare offering today’s consumer convenience, quality and value.”

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